FINALLY, AL GIACCO RETIRES -- MAYBE

By CLAUDIA H. DEUTSCH

Published: March 29, 1987

IF YOU want to see Al Giacco's eyes twinkle, ask him about the time Hercules Inc. developed a silent candy wrapper just because he heard Gene Shalit, the film critic, complain about the sound of candy being opened at the movies. Or about the time he took a tip from the bottled water craze and started to sell bottled methanol.

Or, if you want to hear him laugh out loud, ask why there's a computer at his desk. ''I rarely turn it on, but my managers don't know that,'' the charismatic Mr. Giacco said with a conspiratorial grin. ''So, if they have bad news, they say, 'I better tell Al about it right away.' ''

For Alexander F. Giacco, talking about the $2.6 billion company that he worked for for 45 years and ran for the last seven is as much a romp through reminiscences as it is a sober recounting of billion-dollar acquisitions and divestitures, of government contracts won and lost, of wholesale organizational changes and product line restructurings. His tone is that of proud parent, not hired caretaker. And, as it often is for a father who must give a much-loved only child in marriage, this is a bittersweet time for Mr. Giacco.

Last Tuesday, more than two years after he reached Hercules's mandatory retirement age of 65 - and after far more years of rumblings on Wall Street about the lack of an heir apparent - Mr. Giacco handed over the corporate tiller to David S. Hollingsworth, his 58-year-old vice chairman. Mr. Hollingsworth will take Hercules's chief executive title, while Mr. Giacco goes off to head Himont, a $1 billion joint venture in polypropylene between Hercules and Italy's Montedison that has been his special project since 1983.

Physically and financially, it will not be a wrenching move. Mr. Giacco's pension of roughly $400,000 a year, combined with his Himont salary of $260,000, are not starvation wages, even compared to his $1,040,000 Hercules salary in 1986. And his office will still be at Hercules's Wilmington, Del., headquarters.

But emotionally, it will be a sea change. Although Mr. Giacco will stay on the Hercules board, it is simply not the same. And other executives who have gone through the throes of retirement wonder if he realizes what he is up against. ''I remember right after I retired from Nielsen, I kept looking at what the company was doing and saying, 'Would I have done it that way?'' said Arthur C. Nielsen Jr., now a consultant to A.C. Nielsen and a Hercules director. ''It'll be hard for Al those first few months.''

For longer than that, say psychologists. They question whether any chief executive, no matter how good his intentions, can let go without a fight. They point to many of the high-visibility succession horror stories of the last decade - Harry Gray at United Technologies, who went through four potential successors before finally retiring, Harold Geneen at ITT and William S. Paley at CBS, who kept resurfacing after supposedly handing over the reins to younger men, Armand Hammer at Occidental Petroleum, who has gone through six presidents in 16 years and at age 86 is still running his company without a designated successor -and ask whether both Mr. Giacco and Mr. Hollingsworth have a tougher time ahead than either might suspect.

''It is in effect like letting someone else adopt your child,'' said Harry Levinson, a psychology professor at the Harvard Medical School and head of the Levinson Institute in Belmont, Mass. ''You've raised that child, developed it, and the next person gets all the advantages for free. There has to be resentment.''

Abraham Zaleznik, Matsushita Professor of Leadership at the Harvard Business School, is more blunt. ''When there is a strong chief executive,'' he said, ''the first time a successor is named, it is not going to work.''

FOR all of its appeal to him now, corporate life held little allure for Al Giacco when he was growing up in Meriden, Conn., the oldest of four children. Neither did college, for that matter.

''Our home was a gathering place during the Depression, and we always had people around who my parents would feed,'' Mr. Giacco recalled during a recent conversation at Hercules's plush apartment on Manhattan's 52d Steet. One of those drop-ins was a destitute music professor who repaid the elder Mr. Giacco for those meals by giving the young Alexander clarinet lessons.

From then on, music was his life. He learned the tenor sax, then the guitar, then other string instruments. By the time he was 14 he was writing his own music and ''making good money playing in gin mills,'' Mr. Giacco said. ''I saw no need for college.'' The turning point came for him at the age of 19, when, as he remembers it, he had finally seen too many fellow musicians burn out from the insecurity of a musician's life. ''I was waking up with an anvil on my chest from worrying,'' he said.

He put the instruments and sheet music away and went for a degree in chemical engineering at Virginia Polytechnic Institute. He never played professionally again. ''With music, it was all or nothing,'' he said.

That sort of singlemindedness has marked his career at Hercules too. Al Giacco did not found Hercules, but the company in its present form is as much his creation as if he had.